Non-financial institution (NFI) entities, particularly those with a heavy presence on the Internet and other types of communication networks that involve computing devices, may be associated with a significant number of users. Each of these users may have an account with the NFI entity, which may be used to engage in various services offered by the entity. For example, a social network may have users numbering in the hundreds of thousands, if not millions, and may provide the users with various tools for connecting with others, interacting socially, etc.
As part of the services provided to users, NFI entities may sometimes interact with, or provide for an avenue for users to interact with, a third party. For example, the NFI entity may make a deal with a merchant to offer discounts to the entity's users, which may be of mutual benefit to the NFI entity, the merchant, and the users that enjoy the discount. However, it may be difficult and cumbersome for a merchant to verify that a customer is a user of the NFI entity and eligible for a discount, which may dissuade both the merchant and users from taking advantage of the deal, thereby negating any benefit attempted by the NFI entity.
Some methods for providing users with such a service may involve collecting user payment information, and enabling the user to conduct transactions via the NFI entity. However, users may be wary of providing such sensitive data to the NFI entity. In addition, many NFI entities may lack the technical hardware and system security necessary to both store such information and communicate such information, which may require specialized protocols and communication technology. Another method may involve the establishing of payment accounts with the NFI entity, using a traditional fiat currency or a specialized currency. However, this may require the entity to operate as a financial entity and regularly process payment transactions, which may be costly and require the entity to significantly modify their technical systems, business practices, licensing, etc.
Thus, there is a need for a technical system that can provide an NFI entity with the ability to enable users to conduct payment transactions, particularly person to person transactions, but without requiring the NFI entity to operate as a financial institution or to regularly conduct transactions using traditional payment systems. Some NFI entities have established virtual currencies in order to enable transactions among users. However, these currencies often may be unable to be used outside of the NFI entity, which may be limiting for users, and has historically resulted in low adoption and usage by users. Thus, there is a need for not only enabling users to conduct user to user transactions, but also to enable users to conduct transactions with outside entities, but without requiring the NFI entity to operate as a financial institution.
In addition, in some instances it may be beneficial, or in some jurisdictions even required, to verify a user that is to conduct transactions with outside entities. Limitations in existing NFI entity systems prevent NFIs from verifying the identity of a user to whom currency is provided for use in transactions with outside entities. As such, there is also a need for a technical solution where the identity of a user that conducts user to user and outside entity transactions can be verified.